Total, Chevron declare major oil find in the Gulf of Mexico

The French company said Wednesday it's the largest discovery it's ever made in the region.

Using a floating drillship, French energy company Total and U.S. supermajor Chevron announce a major new oil discovery in the U.S. Gulf of Mexico. Photo courtesy of Chevron

Jan. 31 (UPI) -- French energy company Total said Wednesday it made what it considers the largest discovery it's ever made in the U.S. waters of the Gulf of Mexico.

Total said Wednesday it ran through a deep column of oil while drilling in its Ballymore prospect in the eastern U.S. waters of the Gulf of Mexico. In declaring the discovery, the company said it was already considered a commercial prospect.

"Ballymore is the largest discovery by Total in the prolific Gulf of Mexico and bolsters our new exploration strategy put in place since 2015," Kevin McLachlan, a senior vice president for exploration at Total, said in an emailed statement.

Chevron is the operator with a 60 percent interest in the prospect. Both companies said drilling was progressing to confirm the full potential of the discovery about 75 miles off the coast of Louisiana. The initial well was drilled using a floating drillship.

In September, Total said it was able to capture more opportunities in the Gulf of Mexico through an agreement with Chevron in a deal that gave it between 25 percent and 40 percent of the interest in several fields.

The U.S. government said it expects total production from the Gulf of Mexico to average 1.7 million barrels per day this year and increase by another 100,000 barrels per day in 2019 on expectations of the start up of new fields.

The U.S. Gulf of Mexico accounts for about 17 percent of U.S. oil production and 5 percent of the natural gas. Analysis published earlier this month by consultant group Wood Mackenzie said some deepwater assets in the U.S. Gulf of Mexico can break even with a price of oil below $50 per barrel, making them somewhat more competitive than shale.